I am a General Motors Corp. bondholder. I live in a GM town in a GM state. I've known GM as the No. 1 automaker in the world for my entire adult life. These are some of the reasons I invested in GM bonds, even though some obvious problems could be seen in its business. It appeared the corporation was addressing these problems and would reach its long-term goals.

As conditions deteriorated in the economy and the automobile business, I looked to the protections available to me as a bondholder in the Indenture of 1995, the document that covers the nearly $22 million of bonds and notes between GM and the more than 100,000 holders of these securities. Besides covering times and dates of interest payments, this agreement includes language relating to equally and ratably secured, which generally means that even if my debt is unsecured, if the corporation later offers another party greater security on the other party's loan, mine is equally secured.

This is where the second important covenant enters the picture - the loan agreement between GM and the U.S. Department of the Treasury, dated Dec. 29, 2008. The most noteworthy of the many conditions and requirements contained on its pages is the granting by General Motors of a lien against all its remaining unencumbered assets to the Treasury, in return for the load of $13.4 billion (later raised to $15.4 billion). This single section of legal jargon served to put the bondholders and the Treasury (and by extension the U.S. taxpayers) on an equal standing, should any reorganization of GM occur, either outside or inside a bankruptcy filing.

GM created the third significant document, the Bondholder Exchange Offer, dated April 27, 2009, as an attempt to get bondholders to let the corporation off the hook for failure to get approval for any of the conditions the Treasury had set in the first GM loan agreement. (There is a second loan agreement, but it does not directly concern this discussion.) This exchange offer would remove all the safeguards of the original indenture in return for 10 percent of the common stock in a reorganized GM that would still be subject to a bankruptcy filing if business conditions continued to deteriorate. GM put forth this Exchange Offer at the "strong urging" of the Presidential Task Force on the Auto Industry, to secure for the U.S. Treasury and the United Auto Workers and its Voluntary Employee Beneficiary Association (VEBA) Trust agreement a larger stake in a restructured GM than equity and the existing agreements would dictate. The UAW VEBA mentioned here is in the weakest position, as it has no security in its agreement on contributions to the trust, just a rapidly-diminishing-in-value promise from General Motors.

The longstanding procedure in a bankruptcy is that all claims are evaluated, and if the assets are insufficient to satisfy all claims at 100 percent, an order of security and seniority is established. The clear intent of GM, the UAW and the federal government is to circumvent this and thereby provide greater, if not complete, recovery for suppliers, retirees and taxpayers at the expense of the legitimate claims of bondholders. The Obama administration has at every turn sought to eliminate the constraints within the Treasury's loan agreement with GM to achieve this objective.

Although GM continues to refer to the U.S. Department of Treasury as its biggest lender, the bondholders under the 1995 indenture are the largest by a factor of 50 percent. Whether this will be recognized by a bankruptcy judge or by an ill-informed public is an open question. We bondholders have been referred to by some Obama administration officials as "speculators" and "roadblocks," and that "... it isn't going to pay a ransom to bondholders to complete a GM restructuring." The media characterization of the administration in negotiations is "hard-ball" or "taking a hard line." The bondholders have no option but to take a hard line ourselves.

I am also a GM customer. I have been buying GM trucks and automobiles for 20 years. I suspect many of the 100,000-plus GM bondholders have been doing the same. General Motors' reorganization plan depends upon maintaining a sales level of 2 million units annually. If this group and like-minded individuals were to voice their support for a plan to stop buying GM products, the GM plan would become nonviable. A "quick-rinse" bankruptcy would not be an available option to bludgeon bondholder rights. Bondholders have the power and right to achieve justice in this circumstance. Think about it, GM and President Obama.